In a July 2024 case, the United States Supreme Court found in favor of Starbucks which will result in a harder task for the National Labor Relations Board (NLRB) to intervene when a business is thought to be illegally disrupting labor organizing.
Background
A shift supervisor at a Memphis, Tennessee location, Nikki Taylor, discussed unionizing with her coworkers at Starbucks. However, when she started to talk about unionization, her managers issued Taylor with disciplinary action forms without warning. These were for insubordinate behavior towards a store manager and for wearing leggings to work. Taylor denied both accusations. In addition, a store manager testified that disciplinary actions were rarely taken without warning, and Taylor testified that other Starbucks employees weren’t issued disciplinary forms for dress code violations.
Later in January, Taylor facilitated a Zoom meeting with other union-interested Starbucks employees, formed a union-organizing committee, and drafted a letter to the company’s CEO announcing their intent to unionize. The following day, the committee members distributed union-authorization cards to coworkers. Starbucks closed the store early that day, and after the store closed, news reporters arrived. Taylor, who was off duty, invited them inside. The organizing committee members were interviewed by the media, and before leaving, one union committee member opened the store safe for the cash controller who lacked a personal access code, a typical task of Starbucks employees.
Starbucks launched an investigation of the media event the next day, and the union-organizing committee scheduled a sit-in for January 21st-23rd. In response, Starbucks announced that the store would operate as a drive-through only location from January 20th-23rd. Starbucks also began removing pro-union material pinned to the store’s community bulletin board.
On February 8th, Starbucks fired Taylor and six other pro-union employees, claiming that their termination was because of their behavior during the media event, including:
- Being in the store and going behind the counter while off-duty;
- Unlocking the store to the media
- Handling cash;
- Unlocking the safe while off duty; and
- Supervising while those offenses happened.
The two union organizing committee members who weren’t present during the media event weren’t fired. And while Taylor and others acknowledged that their actions did violate company policy, they testified that management rarely if ever enforced those violations.
After the firings, only one organizing-committee member remained at the Memphis Starbucks. The store continued to operate as a drive-through, and visiting managers came to the store regularly. Almost every employee stopped displaying union pins on their uniforms. One employee testified that he thought wearing his union pin would get him terminated. Starbucks employees from other stores locations also noted that the response to the employees in Memphis made them more concerned about unionization.
On June 7th, Memphis store partners voted to join the Workers United Union. Prior to the vote, the Workers United Union filed charges against Starbucks with the National Labor Relations Board. The union alleged that Starbucks had engaged in unfair labor practices. The NLRB, through Kathleen McKinney, petitioned the U.S. District Court in Tennessee for injunctive relief including reinstatement of the seven fired employees, pending the NLRB’s administrative proceedings. The court granted the petition and ordered reinstatement of the employees, reasoning that there was reasonable cause to believe Starbucks had engaged in unfair labor practices. As a consequence, injunctive relief was appropriate. Starbucks appealed the district court’s order, and the U.S. Court of Appeals for the Sixth Circuit affirmed, finding that Starbucks’ actions demonstrably chilled unionization and holding that injunctive relief was justified. Starbucks asked the Supreme Court to review the case.
The question before the Supreme Court was whether Section 10(j) of the National Labor Relations Act authorizes the NLRB to seek a preliminary injunction from a federal district court while these administrative enforcement proceedings take place based on the traditional four-factor test or pursuant to a different standard of whether the injunction is “just and proper” when there is reasonable cause to believe the unfair labor practices has occurred.
The Decision of the Supreme Court
In an opinion written by Justice Clarence Thomas, the Court found that because nothing in § 10(j)’s, 29 U.S.C.S. § 160(j)'s, text overcame the presumption that traditional equitable principles governed, district courts considering the National Labor Relations Board’s request for a preliminary injunction had to apply the Winter framework, which embodied those traditional principles. The case was vacated and remanded.
Justice Thomas said that the Winter standard requires a plaintiff to make a clear showing that “he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest.”
Section 10( j) authorizes a federal district court “to grant . . . such temporary relief . . . as it deems just and proper” during the pendency of the Board’s administrative proceedings. When Congress empowers courts to grant equitable relief, there’s a strong presumption, Justice Thomas wrote, that courts will exercise that authority in a manner consistent with traditional principles of equity. For preliminary injunctions, the four criteria identified in Winter v. NRDC, Inc.(2008) encompass the relevant equitable principles. Nothing in §10( j) displaces the presumption that those traditional principles govern, Justice Thomas opined. As a result, the Court concluded that district courts must use the traditional four-part test when evaluating the Board’s request for a preliminary injunction under §10( j).
The default rule is that a plaintiff seeking a preliminary injunction must make a clear showing that “he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest,” Justice Thomas wrote, quoting Winter. Starbucks Corp. v. McKinney (United States Supreme Court, 6/13/2024).
Takeaway
Courts must grant preliminary injunctions against employers for labor disputes based on the traditional four-factor test when there is reasonable cause to believe the unfair labor practices occurred. In addition, district courts are not required to defer to the National Labor Relations Board’s preliminary investigations and legal judgments when deciding on preliminary injunctions under Section 10(j) of the National Labor Relations Act in the course of an unfair labor practice investigation.